PREPARATION OF THIS PAPER

This document has been prepared as part of FAO's Regular Programme activities, aimed at assisting
fishery administrators and other persons responsible for the management of fisheries. It is one in a
series of technical papers relating to the PRACTICES OF FISHERIES MANAGEMENT. The list of these
papers is given at the end of this document.

Reprinted 1992

This document has been prepared as an aid in training courses in
fishery management and development. It focusses primarily on the
economic aspects of fishery management and particularly within the
context of free market economies and in conditions where
unemployment is not a severe problem. Emphasis is given to the
regulation of fishing effort as a means for overcoming the economic
efficiency that is associated with common property fisheries. The
approach taken in the paper is valid and important for many
situations, but it is not universally applicable. It must be recognized
that the goal of optimizing social benefits from fishery development
and management can be achieved in a variety of ways in accordance
with each nation's individual value system. Issuance of the document
does not imply the expression by FAO of any opinion whatsoever
concerning the legal or constitutional status of any country, territory
or sea area, concerning the delimitation of boundaries or concerning
any country's policy making and administrative procedure.

All rights reserved. No part of this publication may be reproduced, stored in a
retrieval system, or transmitted in any form or by any means, electronic, mechanical,
photocopying or otherwise, without the prior permission of the copyright owner.
Applications for such permission, with a statement of the purpose and extent of the
reproduction, should be addressed to the Director, Publications Division, Food and
Agriculture Organization of the United Nations, Viale delle Terme di Caracalla,
00100 Rome, Italy.

Fishery management relates to a total system made up of resources,
industry and trade. There are important linkages between these
components. In contrast with other resource industries, common
property in fishery resources implies that there is no market
mechanism through which access to these resources could be
allocated among users. In many cases, governments have been forced
to intervene, rightly or wrongly, to fill this vacuum. Economically,
rational fishery management necessitates the transformation of
common property through some kind of limited entry system designed
to optimize net benefits from the fishery. Management planning
involves the definition of goals and policy objectives and the
development of strategies to assure attainment of policy objectives.

ACKNOWLEDGEMENTS

Acknowledgement of every source, personal and documentary, of knowledge and insight contributory
to the content of this manual would be quite impossible: their number is beyond calculation. I
should mention, however, that, among recent writings relating to the subject, I owe much to those of
P. Copes, J.A. Crutchfield, G.R. Munro, H.A. Regier and A.D. Scott, and am indebted especially in the
present instance to those of T. Panayotou, P.H. Pearse and J.-P. Troadec.

Useful comment on preliminary drafts of this work was received from the last named author, who
commissioned it, and from others in the Fisheries Department of F.A.O., especially F.T. Christy, Jr.
Preparation of the final version benefited also from oral discussion with those referred to and a number
who participated in a seminar on this subject in Rome on 12 February 1982.

Needless to say, none of those referred to is to be blamed for the shortcomings and blemishes that
remain. In that respect, the writer solely is culpable.

W.C. MacKenzie

Ottawa

(March 1982)

EXECUTIVE SUMMARY

1. THE COMMERCIAL FISHERIES AS A SYSTEM

1.1 Preamble

A major theme of this paper is that fishery management relates to the total system, consisting of
the resource base and the (harvesting and processing) industry and the trade by means of which the
natural resources are utilized in the service of product markets. The central objective of management
is optimization of the aggregate social benefit derived from these activities as a whole.

1.2 Component Structure

1.2.1 The Resource Base

The natural-resource base consists of the resource endowment, i.e. stocks of fish species, and the
supporting natural environment or habitat. Protection of that habitat as well as conservation of the
fish stocks therein is a primary responsibility of fishery management.

Fishery resources are finite, stocks are exhaustible and interrelationships among them are highly
complex. Knowledge of stock magnitude, behaviour and response to fishing pressure therefore is
imperative for intelligent management.

A peculiarity of fishery resources is that traditionally (with minor exceptions) they, as well as
their aquatic habitat, have been common property. The extension of fishery-management jurisdictions
(200-mile EEZs) by coastal states has transformed extensive tracts of these resources into national
(from formerly international) common property. Because of differences in cost structure and social
values, negotiations between countries for the allocation of shared resources present some of the most
difficult problems for fishery management.

1.2.2 The Primary Fishing Industry

This division of the commercial fisheries consists of the enterprises (of all types and sizes)
engaged in the harvesting of fishery resources. Organization varies greatly from place to place,
depending on historical evolvement and on current economic and socio-political factors.

As a consequence of open and free access to the use of common-property resources, traditional in
the fisheries of most parts of the world, which compels fishing enterprises to disregard collective
interests in a progressively intensified competition for shares of a (naturally or administratively)
limited catch, mature industries are prone to crises and impoverishment. Because of the resulting
pressure to circumvent and/or emasculate fishery regulations, a secondary effect often is depletion of
the natural resources, which compounds the problem. The small-scale or artisanal fisheries, which in
many places are an occupation of last resort, tend especially (as a result of gross overcrowding) to be
devastated by such crises.

The divergence between individual and collective interests is the cause of the inter-group
conflicts that are a characteristic of the fisheries almost everywhere, e.g. conflicts between small-scale
(inshore) and large-scale groups dependent on the same market and between domestic and foreign
fishermen.

1.2.3 The Fish Processing Industry and the Fish Trade

The processing of fish in advanced forms (filleting, freezing, curing and canning) becomes an
important industrial segment when fish must be stored and/or transported to distant markets. Storage
is required when supply and demand are out of phase seasonally, i.e. when either production or
consumption are concentrated in particular periods of each year. Peakedness in the catch is often
inevitable but sometimes is due to poor organization or to the use of an inadequate, i.e. small-scale and
relatively immobile, harvesting technology.

Economies of scale in fish processing are realized principally in business organization, i.e. in the
bulk-purchase of supplies and consolidation of marketing, for example, rather than in the processing
operation itself. Like artisanal fishing and in contrast with industrialized fishing, fish processing tends
generally to be labour intensive.

The fish-processing industry and by extension the fish trade (marketing and distribution)
sometimes reflect the fragmentation and dispersion of the fish harvesting industry. This can be a cause
of excessive costs and, in the case of export trading, a source of weakness in competition with better
organized rivals.

1.3 Linkages and Interdependence

1.3.1 Factor Supply

Since the fisheries are an open system, there are important linkages with sources for the supply of
labour and capital. Capital requirements include funds for investment in capital assets (infrastructure,
plant, vessels, gear, etc.) and for operation (payroll and inventory financing, etc.). Primary fishing
enterprises especially often are unattractive to private sources of funding (banks and the like). Because
of this, governments are induced to provide credit services for the fisheries. Unfortunately,
intervention in this way by government tends to reinforce the inherent pressures toward over-expansion
in the commercial fisheries.

On the other hand, the provision of public goods, e.g. scientific-research and extension services,
harbour works and so on, which are accepted as a legitimate responsibility of government in most
societies, is an essential underpinning of fishery development.

The commercial fisheries are linked with a wide variety of equipment-supply sources, the major
such source being the shipbuilding industry and ancillary industries and services associated with it.
Through these linkages, the development of a viable fisheries sector (in proportion to its size) may bring
about a significant development in other sectors of the national economy.

1.3.2 Product Markets

The initiation, adaptation and expansion of fishery production is determined by opportunities for
the sale of products. The demand for food products of the fisheries tends to be inelastic but is subject,
to some extent, to manipulation.

A product market transmits, by means of prices, intensive demands for some species and rejection
of others. Effective management of fishery-resource use in an ecological context, however, presumably
would require balanced exploitation of the species stocks involved. Market signals, that is, fail as a
guide for management decisions in this respect.

2. MANAGEMENT OF THE FISHERIES

2.1 Introduction

2.1.1 The Involvement of the State

In contrast with other resource industries, common property in fishery resources implies that
there is no market mechanism through which access to these resources could be allocated among users.
More or less inadvertently, government has been drawn into the vacuum.

Governments have tended to adopt employment maximization in the fisheries as the primary
objective of management and to concentrate effort on the resolution of conflict among vested
interests. Since the former action contributes to the latter problem, this approach to fishery
management is self-defeating. It leads, moreover, to intolerable complexity of regulation and
unsustainable enforcement costs.

2.1.2 Development as Management

The necessity for fishery-resource conservation originates from the industrial, as distinguished
from natural, predation of fish stocks. Since that predation is initiated by a demand for fishery
products and is intensified by growth in such demand, it follows that fishery management involves the
“management” of fishery development.

Supply management in fisheries (often important for successful export trading) presents extreme
difficulties but opportunities exist (a) for relating catch quotas to the marketing outlook, and (b) for
complementary use of aquacultural production. Movement in the direction of (a) may be politically
difficult in some cases, because of a potentially adverse affect on elements of the small-scale fisheries
and the communities they support.

2.2 Rational Fishery Management

2.2.1 The Transformation of Common Property

The socially wasteful propensity in the commercial fisheries and their proneness to crises and
impoverishment are directly traceable to the institution of common property in fishery resources and
open and costless access for resource users. Common property and open access, however, are not
inevitable: the conversion of a national property to some form or forms of private property may at
times be feasible.

The form suggested is that of a usufructuary right for fishery-resource users, i.e. the right to the
use of a state property for individual fishing enterprises (persons, groups, communal organizations
corporations, etc.). The right in some instances might pertain to an identifiable discrete stock, in other
instances to a share in a total allowable catch (TAC), for example.

Such rights would be granted on a long-term basis and, to facilitate entry, adjustment and exit
(except for provision against abuse, e.g. monopolization), they would be freely transferable. By
motivating producers to operate at lowest private cost, this arrangement might be expected (a) to
optimize net social benefits from the fishery harvest, and (b) to minimize state involvement in
regulatory activity in the fisheries.

2.2.2 The Rationalization of Mature Fisheries

Application of the “ideal” approach just outlined, as an institutional innovation, is likely to
encounter formidable obstacles in the real world, e.g. opposition from entrenched interests, social
inertia and political sensitivity to the disruptive impact of change.

There are practical difficulties as well to be overcome, e.g. accommodation of all existing
participants in a fishery, adjustment to variation and vagary in resource (stock) availability, adaptation
to multispecies stocks (typical of tropical waters) and prevention of cheating (under-reporting of
catches).

A regime of usufructuary or similar quasi-property rights in fisheries, therefore, may have limited
applicability at present. Among alternatives, only a state (or a regulated private) monopoly might
realize the benefits of such a programme or most of them.

A provisional approach would be a simple entry-control programme, which, under certain
conditions, might be managed so as to minimize the potential for erosion of social benefits intrinsic in
the struggle among fishing enterprises for resource shares. The collection of a royalty on fish landings
would (a) dampen the tendency toward wasteful investment and practices, and (b) return to the public a
proportion of the resource rent generated under closed entry.

2.3 Management Planning

2.3.1 Definition of Goals and Policy Objectives

Policy making for fisheries embraces not only industrial regulation, which is complex enough, but
also trends and events in other areas of national policy that impinge on the fishing industry and the fish
trade, e.g. foreign trade, public finance and social affairs. Integration of governmental planning across
a wide front, therefore, is of great importance.

Planning and policy making, like the execution of policy, is essentially an activity of institutions
(as opposed to individuals). The key role is that of the executive, i.e. the political head of bureau or
agency who, however, requires the support of competant policy analysts as advisers. A common
impediment to efficient performance of the analytical function, in developing countries more
particularly, is the lack of an adequate knowledge base. A priority for establishment of the necessary
research and data-gathering services is thus indicated.

Planning involves, among other things, (a) the setting of goals, i.e. articulation of society's
aspirations, a basically political contribution to the policy-making process, (b) a restatement of those
broad aims in operational terms for fishery-management and development purposes, and (c) definition of
goal priorities or policy objectives. Recognition of conflicts among objectives and evaluation of the
necessary compromises or trade-offs become imperative at this point.

2.3.2 Strategies, Tactics and Adaptation to Change

Few objectives have universal validity. Customarily, they differ from country to country and
change over time, in accordance with (a) the prevailing value system, e.g. with respect to income
distribution in society, and (b) the particular stage of development of a country's fisheries. In so far as
possible, action in the present should not foreclose options for the future.

It is important too that the strategic phase of planning not be neglected. Strategies provide the
guidelines without which tactical planning (the design of specific programmes) is liable to be
misdirected and wasteful. Since they are intended to assure attainment of policy objectives, strategies
must be devised to conform with the particular requirements and circumstances of a country's fisheries.

Equity and effectiveness in the execution of policy require (a) that the framework of rules and
regulations be reasonably stable and predictable, (b) that such rules and regulations be the least
necessary and interfere as little as possible with the economic interests of those affected, and (c) that
they be applied with due flexibility. That policy makers and administrators be seen to be responsive to
the needs of interested groups is an urgent requirement also. Appropriate channels therefore must be
provided (a) for the receipt of client input to the planning process, and (b) for the evaluation of
programme impacts.

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